Louisiana Governor John Bel Edwards declared a Public Health Emergency that included a strict shelter-in place order aimed at limiting the spread of the COVID-19 virus. This order has caused significant disruption to businesses across the state, with many businesses becoming non-operational. Consequently, property owners may be eligible for property tax relief in the 2020 assessment year and possibly the 2021 assessment year as well.

Louisiana law

Under La. Rev. Stat. Section 47:1978.1(A)(1), "if lands or property, including buildings, structures or personal property, are damaged or destroyed, non-operational, or uninhabitable due to an emergency declared by the governor or to a disaster or fire, the assessor or assessors within such parish shall assess such lands or property for the year in which damage has occurred at the percentage of fair market value provided in the Constitution of Louisiana by taking into consideration all the damages to the lands or other property, including obsolescence, and the depreciation of value of such land or other property caused by the disaster, fire, or emergency described in this Section" (emphasis added). Many business properties within each parish would appear to be non-operational due to the Governor's emergency declaration.

Property tax relief

All parishes in Louisiana are reassessing taxable real property this year due to the timing of their four-year reassessment cycle. This presents taxpayers with a unique opportunity to argue economic obsolescence (the loss of property value due to external factors) in their reassessment, thereby obtaining property-tax relief. After such values are released, taxpayers can present a written appeal to the local assessor stating the impact of Governor Edward's declared Public Health Emergency. The appeal should include facts and data to support the impact of being non-operational during the period in which the shelter-in-place order is in effect. Given the timing of these orders, taxpayers should be able to provide evidence of the market value well beyond the date when taxes for the fiscal year become a lien on the property (this "lien date" can be set by jurisdiction and is January 1 for all parishes except for Orleans Parish, which is August 1). This creates a potential opportunity for reductions in the 2020 assessment year; if the impact continues, additional relief could be provided in the 2021 assessment year.

Implications

Taxpayers are encouraged to work proactively with local assessors for the most optimal outcome. In general, property taxes must be paid while claims are pending. Due to the circumstances, however, some property tax payment deadlines are being postponed without penalty. Given the uncertainty surrounding the COVID-19 emergency, regular roll appeals for 2020 and 2021 lien dates should be filed to fully preserve taxpayer rights.

EY is ready to assist Louisiana property taxpayers in this process and will monitor this development and issue additional Tax Alerts as warranted.

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